Richard Sloan from the University of Michigan was first to document what is referred to as the "accrual anomaly". His 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones.
Nordstrom's Sloan Ratio for the quarter that ended in Jan. 2024 was 0.98%.
As of Jan. 2024, Nordstrom has a Sloan Ratio of 0.98%, indicating the company is in the safe zone and there is no funny business with accruals.
Nordstrom Sloan Ratio % Historical Data
The historical data trend for Nordstrom's Sloan Ratio % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Department Stores subindustry, Nordstrom's Sloan Ratio %, along with its competitors' market caps and Sloan Ratio % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Nordstrom Sloan Ratio % Distribution
For the Retail - Cyclical industry and Consumer Cyclical sector, Nordstrom's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Nordstrom's Sloan Ratio % falls into.
Nordstrom Sloan Ratio % Calculation
Earnings contain a lot of non cash earnings which is called accruals. The Sloan ratio is a way to identify firms with low non-cash or accrual-derived earnings relative to their cash flow.
Nordstrom's Sloan Ratio for the fiscal year that ended in Jan. 2024 is calculated as
Nordstrom's Net Income for the trailing twelve months (TTM) ended in Jan. 2024 was -205 (Apr. 2023 ) + 137 (Jul. 2023 ) + 67 (Oct. 2023 ) + 134 (Jan. 2024 ) = $133 Mil.
Nordstrom's Cash Flow from Operations for the trailing twelve months (TTM) ended in Jan. 2024 was 16 (Apr. 2023 ) + 449 (Jul. 2023 ) + -358 (Oct. 2023 ) + 514 (Jan. 2024 ) = $621 Mil.
Nordstrom's Cash Flow from Investing for the trailing twelve months (TTM) ended in Jan. 2024 was -123 (Apr. 2023 ) + -106 (Jul. 2023 ) + -147 (Oct. 2023 ) + -195 (Jan. 2024 ) = $-571 Mil.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Nordstrom (NYSE:JWN) Sloan Ratio % Explanation
A former University of Michigan researcher, Richard Sloan's 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones. In fact, for the 40-year period between 1962 and 2001, buying the lowest accrual companies and shorting the highest accrual companies resulted in an average annual compounded return of 18%, more than double the S&P 500's 7.4% annual return over the same period.
If the Sloan Ratio is between -10% and 10%, the company is in the safe zone and there is no funny business with accruals.
If the Sloan Ratio is less than between -25% and -10% on the negative side, and between 10% and 25% on the positive side, this is a warning stage of accrual build up.
If the Sloan Ratio is less than -25% or greater than 25%, and this ratio is consistent over several quarters or even years, be careful. Earnings are highly likely to be made up of accruals.
As of Jan. 2024, Nordstrom has a Sloan Ratio of 0.98%, indicating the company is in the safe zone and there is no funny business with accruals.
Nordstrom Sloan Ratio % Related Terms
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Nordstrom is a fashion retailer that operates about 93 department stores and approximately 260 off-price Nordstrom Rack stores. The company also operates both full- and off-price e-commerce sites, two clearance stores, and seven Local locations. Nordstrom's largest merchandise categories are women's apparel (28% of 2022 sales), shoes (26% of 2022 sales), men's apparel (15% of 2022 sales), and women's accessories (13% of 2022 sales). Nordstrom, which traces its history to a shoe store opened in Seattle in 1901, continues to be partially owned and managed by members of the eponymous family.
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